What should I offer a motivated seller?
By Josh MillerUpdated 5 min readWork your offer backward: start from what the house will sell for fixed up, subtract repairs, your buying, holding and selling costs, and the profit you need, and what's left is the most you can pay. Show the seller the math, and if the number doesn't work for them, offer terms like subject-to or seller financing before you walk away.
Every investor has heard the 70% rule. It's a fine first guess and a bad final answer. Here's how to build an offer you can defend, and how to say it so the seller hears it.
Work it backward
| Line | Amount |
|---|---|
| What it sells for, fixed up (after-repair value) | $300,000 |
| Less repairs | -$40,000 |
| Less buying and closing costs | -$6,000 |
| Less holding costs: loan, taxes, insurance, utilities for 5 months | -$12,000 |
| Less selling costs: commission and closing | -$18,000 |
| Less the profit you need | -$30,000 |
| Most you can pay | $194,000 |
If you're wholesaling, your buyer runs the same math, so subtract your assignment fee too. How assignment fees work.
The 70% rule would have said $170,000 here. In pricier markets it runs low, and in cheap ones it can run too high, because costs don't scale with the price. Do the lines.
Get the inputs right
- After-repair value: recent sales of fixed-up houses near this one, similar size, sold in the last few months. Not the seller's Zillow estimate.
- Repairs: walk the house. Roof, foundation, HVAC, electrical and plumbing first; finishes last.
- Time: every extra month adds holding costs. Be honest about how long it takes in your market.
What investors paid, from the deed records
Deed records show what investors actually pay, one sale at a time. One example from Harris County, Texas: in August 2026, an investor LLC bought a Houston house the county's estimate put at about $433,000, for $262,600. That's one deed, picked from investor purchases we track, not an average, and it doesn't tell you the repairs. See recent investor deals in your county.
Say it with the math
"Here's how I got there: it'll sell for about $300,000 fixed up. The repairs I saw come to about $40,000. Holding it and selling it costs about $36,000. I need to make about $30,000 for the risk. That leaves $194,000."
A seller who sees that can disagree with a line, and you can talk about the line. A seller who hears "$194,000" with no math just hears "low."
When cash doesn't work, offer terms
If the seller needs more than your cash number, a different structure can close the gap: a higher price paid over time with seller financing, or taking over the loan subject-to. And if listing it will truly net them more, tell them. They'll remember you when the next house comes up.
Questions investors ask
How do I calculate an offer on a house?
After-repair value, minus repairs, minus your costs to buy, hold and sell, minus the profit you need. If you're wholesaling, also subtract your assignment fee, since your buyer has to make their profit too.
What is the 70% rule?
A rule of thumb: pay no more than 70% of the after-repair value minus repairs. It folds costs and profit into one number. It's a starting point that runs too low in pricey markets and too high in cheap ones, so do the full math.
Should I show the seller how I got my offer?
Yes. A seller who sees the repairs and costs line by line is far more likely to accept than one who just hears a low number. It also shows you're not guessing.
What if the seller wants more than my offer?
Ask what their number is based on, show your math, and offer a different structure: more money over time through seller financing, or taking over the loan. If none works, tell them listing may get them more.